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What is renovation insurance – and when do I need it?

Renovation can suggest major structural alternations to a property going on over months, which means that your standard owner-occupier home insurance (or landlord insurance if you let the property) typically may not provide the level of protection needed, and specialist renovation insurance might be a better fit.

Let’s look at some of the issues.

Insurance definitions of decoration

It’s typically the case that most property insurance providers will differentiate between the concepts of decoration and renovation – even if the definitions may differ very significantly from one policy to another.

Broadly speaking, DIY or ordinary tradesperson type decoration shouldn’t be a problem for most standard policies. Those are the sorts of activities encompassing things like freshening up a room, putting down a new carpet or painting the window frames.

There may be some exceptions though, for example, if you’ve hired a tradesperson to strip some wood in your property and they’re using industrial-strength machines or hazardous materials to help them. That leads to our first top tip:

  • it’s always worth checking with your insurance provider in advance whether or not the work you’re undertaking meets their definition of ordinary decoration and whether or not it will have any effect on your insurance cover.

Keep in mind that sometimes what you might call decoration may change the value of your house. An example might be simply wallpapering and minor electrical work in an already converted loft that transforms it into other bedroom (ignoring here any planning permission issues):

  • be doubly sure to check with your insurer if any decoration work you’re doing will result in materially changing the description of your property and/or its value.

Insurance and renovation

Renovation is typically considered to include:

  • any work that involves structural alternations to your property – that typically would include things such as adding an extension, subdivisions that result in adding rooms, adding new windows or doors, loft conversions, wall removals and so on (that list isn’t by any means all-inclusive);
  • work that requires you to vacate your property while it is completed;
  • re-roofing;
  • the replacement of joints and other major timbers;
  • complete re-wiring and/or re-plumbing;

In all such cases, you might typically discover that standard household / landlord policies would either severely limit your protection or perhaps become invalid altogether, as you don’t have specialist renovation insurance.

That’s because both during and after the renovation work, you may be changing what’s called the risk profile associated with your property. That may sound complex but it isn’t.

To explain:

  • the type of cover your insurer provides and the premium they charge is linked directly to their understanding of the risks they’re taking (i.e. the risk profile);
  • anything you do which changes the risks associated with your property, as in renovations, will typically mean you’ll need to take steps to ensure your ongoing cover.

If you’d like to know more about the principles here, we can’t stress strongly enough how much you might benefit from reading our online guide to property renovation and associated insurance.

Additional or varied cover

Property renovation insurance is a form of cover which provides that continuity of protection in your new circumstances.

The policy provider will look at what work is being undertaken and agree to provide appropriate replacement or supplemental cover (subject to the exact nature of the proposed work).

It’s worth noting that not only is such insurance typically advisable if you’d like to protect your ongoing financial interests but it’s also very probably an obligation under the terms of any mortgage contract you have on the property.

We’d welcome your enquiries for more information.

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